I'm beginning to concede that Obama is worrisome. While it is too early to judge him on his actions, it is not too early to begin to see a pattern. There is a part of me that fears a Manchurian Candidate. There has been precious little for the working man up to this point and Obama may be looking to Kent Conrad to get him out of his campaign promise to bring us a National Health Care program. It's worrisome.

This is the money question of the day....everyone will be postulating.

My sense is that the CEO's of the auto industry are dispensible as dinosaurs of an oil-based economy. The world economy is rapidly changing on a global scale for which the banking CEO's must be intended to remain as "players". Continuity is mandatory to prevent financial collapse -- it doesn't seem "fair" but it may be necessary in the short run.

On the other hand, the auto industry continues to obstruct innovations of new technology that have been known for decades. GM basically squashed the production of electric cars when it had the opportunity to produce and market them. Countless interviews show Wagoner to be hard-headedly opposed to implementing new technology for the mass production of hybrids and electric cars.
I imagine the administation finds Wagoner hopelessly intertwined in the mechanizations of an oil-based economy.

There is no simple way to shift out of a world wide economy. I sense a global plan is in play -- CEO's of the auto industry are less useful than those in the financial sector just now. We will have to be a little patient as change unfolds -- undoing an oil-based economy in a structured manner is going to take time and a lot of political backing worldwide. I hope it can be done -- it is time.

I fear that in a global economy, there is no place for the UAW.

Excellent question and I have to chew on this one. I do know that GM is tied with HSBC and part of a conglomerate of financial services. GM branched into real estate services too, and those services are part of GMAC, General Motors Acceptance Corporation. GM is more into the alternate fuel of ethanol in developing new auto technologies. I'm wondering who the other chief officers and top executives are at GM. Who is going to replace Wagoner? Still thinking, thanks for bringing this question to attention.

of course i know the difference.

BOW DOWN, unions, or lose your jobs!

with the car companies, its not about the CEO's, its about scaring the shit out of labor. labor that makes a living wage. we dont want any more of that shit here in america.

AND WHERE ARE THE CONCESSIONS FROM ALL THE BANK EMPLOYEES ETC, AND ALL OF THEIR STAKEHOLDERS?

MONEY TALKS. BULLSHIT WALKS.

UNIONS ARE THE ONLY REPRESENTATIVE OF THE AVERAGE WORKING PERSON. WE NEED A RETURN TO UNIONIZATION BIG TIME.

I think that Wall Street 'creates wealth' and GM, etc consume money and put out crap.

But when you look at it, Wall Street does 'create' and then eats most of it themselves.

AIG, et all should be allowed to fail. By allowing GM/ Chrysler to fail, Obama will accomplish the same end, it will just take a little longer. Let's get the pain going so that we can recover quicker...

America is like the drunk praying for the 'porcelain gods', not wanting to barf but only with purging can recovery begin...

Or maybe the analogy should be diarrhea and food poisoning?

Nothing good can come of this.

For me, this is simply a method to break unions while preserving the perquistes of the NY finance community. Any bankruptcy is going to permit GM and Chrysler to re-set all their contracts with the biggest losers being the current and retired union employees. Obama will merely finish what Reagen began 27 years ago.

P

This is becoming worrisome - but what can we do about it?

This merely serves to preserve the illusion that auto executives were the masters of their own destruction, while banking executives were merely innocent bystanders in a catastrophe over which they had no control. Until we change that perception, nothing else will change.

I like what lalucas said (with one caveat) and Petra Hoffman. My caveat to lalucas is that he thinks that this favoritism towards finance capital is a good thing and that it is part of a good transition. I am not so sanguine. The centrality of finance capitalism is a tenet and an outstanding feature of late stage capitalism - i.e., imperialism. When Obama was running for the presidency, Wall Street gave him at least 20 million dollars more than they gave to McCain. They knew, as Matt Taibbi pointed out in Rolling Stone, that he wasn't going to do all of the things he claimed he was going to do. They knew where things were going.

I guess the administration must have bought into the preposterous idea that the same bastards who ruined the financial industry are the only ones who can resurrect it. That's as untrue for Wall Street as it is for Detroit.

Regardless of the double standard, Wagoner needed to go. Perhaps this will turn out for the best.

I think the whole country should step down. We can't see the forest for the trees.

In ancient Rome they kept saying, "If only we could get the right Caesar in charge, we could make things right." But the true problem was that they had a caesar in the first place.

Lalucas is right but makes the case that both are really so similar.

BOTH industries worked the political machine to get what they wanted. Both 'bought' legislation and regulations (or not) for their specific industries. Both played the American public while crapping on the middle class and cheating everyone.

BOTH have a lot to answer for and apparently if I was a rather well to do black man that was born in Hawaii and went to law school then maybe I'd see why things have to be the way Obama sees them but not being that, and already seeing the fantastic judgment of this administration, I think we all have room to fear that Obama is mislead, or worse.

He's not playing to the people that elected him, he's not playing to the people that supported him, he's playing to the republican/libertarian/fascist base of the other party!

His administration isn't giving me much hope for the future. We just lost two more chain stores to bankruptcy and things are looking grimmer and bleaker around here and he's playing patty-cake with Wall Street while Rome burns...

Give AIG their bonuses and slit their throats and leave them for dead... Prosecute their management and let them rot in jail.

But Obama is really scared of the words 'investigate' and 'prosecute'... Why? Who is he really protecting besides Bush and Wall Street?

He needs better advisers but I thought that at some points in the campaign.

Obama, flash-in-the-pan one-term president...

I can point out the difference. It's very clear and simple.

B of A and Goldman were profitable in 2008. They made money in the worst financial environment since the Great Depression.

GM is a basket case.

So, the CEO who ran GM into the ground should be fired due to lack of performance. CEOs who run financial companies which managed to make money in the worst financial environment since the Great Depression should keep their jobs.

That's the difference.

You fire one CEO for not doing his job. The other two did their jobs so you retain them.

One also can't dismiss the idea of the 'golden parachute's' that I'm sure that many of the Wall Street people will get.

It's more like a 'golden shower' for the stockholders and the public because if some of these idiots are pushed out for valid reasons they float to the ground on gossamer wings provided by the companies they ran into the ground!

Where is the logic in that? If you screw up badly enough that you are fired, you should walk with nothing but a cardboard box full of your desk contents, and be escorted by corporate security...

But Tony, that's the problem. They literally MADE money.

They gamed their market. They created profits that weren't there and traded them and real people suffered.

Would GM have survived if every car that they made literally self destructed within a year of purchase and left the owner sitting on the highway with nothing to show for the money they spent?

I'm not the king of analogies but those profits of 2008 were crap. They were 'profits' because they said they were and when they turned out to be crap, the sky fell. Or at least that's what I gather from the reports. Maybe I misunderstand things. It wouldn't be the first time...

Government of men indeed. How many of the people setting policy in the White House to work at investment banks? The bigger question is why does anyone think they actually want to curtail abuses in banking. I'm from Canada, banking is boring here and I'm glad.

AIG CEO Martin J. Sullivan became unemployed last summer.

Lehman's Dick Fuld lost his job last year.

Merrill Lynch's John Thain joined the unemployment line when Merrill was merged with Bank of America.

Jimmy Cayne of Bear Stearns lost his job.

Plenty of bank, brokerage, and insurance CEOs have lost their jobs, and more may be on the way (there's pressure for the Citi CEO to step down). Moreover, there's been no pressure for either Ford or Chrysler to replace their CEOs.

And are people really wishing that Obama *hadn't* pressured GM to kick out Wagoner?

This is outrage based on an incomplete understanding of the circumstances. Plenty of Wall Street managers lost their jobs without any prodding from the Obama administration!

Gonzoid, what you're saying is a common misconception.

You can't tell me that B of A just creates products that have nothing to do with reality just so they generate profits. B of A is one of the biggest issuers of credit cards in the country. Those profits are real and not phony paper profits. Same thing with their loans to consumers and businesses. Those generate real income. And commissions for trading through Merrill are real revenue. And when someone bounces a check or does a stop payment for a check, that's real revenue.

The bottom line is that the CEOs of B of A and Goldman did their jobs. They generated profits and unlike the CEOs of Lehman and Bear Stearns and AIG and GM, they didn't run their companies into the ground.

On top of that, B of A is actually one of the more progressive companies when it comes to shareholders. None of the execs listed in its annual report will get a cash bonus this year even though the company was profitable. And they also have a management sponsored resolution for shareholders to have an advisory vote on executive compensation.

Wagoner failed or refused to do something the Obama administration wanted. The financial execs agreed to do what the administration wanted. Both now work, as Cabinet officials say of themselves, "at the pleasure of the President." As such, the question is not whether Obama had the right to issue and act upon the demands he made in either case, but whether the demands were the correct ones in either case. I don't know the answer to this question and I suspect Mr. Sirota does not know the answer.

I live in Toledo, a town built on the auto industry. Our biggest employers are Chrysler and GM. So, I was both stunned and angered by the President's dissing the auto industry. What was that slogan again - change you can believe in?

Isn't this the same approach Bush's adminstration had? Coddle the financial industry and to hell with the Big 3? So, why, Obama, if you are the change we've been waiting for, are you hanging GM and Chrysler out to dry and letting Geithner's banking cronies hand out their bonuses (funny how the President flip-flopped on that issue!) and go on with business as usual?

DL got it right! Wall Street owns Obama like Big Oil owned Bush. You can't very well oust the folks that gave you 40% of the money raised for your campaign (at least that's what I've read). We know that he, McCain, and Dodd all got hefty donations from these folks. It's a matter of public record - one of the few things that is in this administration that promised transparency and is strangely opaque.

I agree with HH. The problem is that we have to have a "Caesar" in the first place. I think NBC's new series "Kings" is a metaphor for how power is brokered at this level and the function of the charismatic figurehead leader. Obama is the Democrat's "Reagan," just as Bush was the their "Clinton." If we're not careful, Obama may become the Democrat's "Nixon," or it's second term Busy, except I agree with Gonzoid; Obama is a one-term wonder.

Is this really such a hard question to answer? Whether they like it or not, the government has to show confidence in its financial sector, or risk people pulling their assets and putting them into in foreign banks.

For example, since the crisis, four of the American banks that used to comprise the top ten richest banks in North America have been replaced by Canadian banks, which now rank, 10, 9, 8, and 7. I'd love to see them crawl further up that list, but I don't think your government would.

That risk doesn't exist to the same degree in the auto industry.

Juliet, Canadian banks are a good place to look for long term investing opportunities! It's because they didn't do the things like WaMu and Wachovia did. They just keep on doing the same old boring things that banks have done since the beginning of time -- they take in money from depositors and lend it out at higher rates to borrowers and profit from the difference.

I wish I had capital, because I'd start a bank that focuses on secured credit cards.

Tony -- I couldn't help but notice you almost praising B of A execs for not taking a cash bonus despite being profitable. I guess I feel somewhat vindicated -- it seems you too think, even when a company's books are in the black, it's prudent to leave money in it during a recession? :)

Why not bank CEOs? Simple... Auto assembly lines don't run on models of improbability and global risk management algorithms. They've become mini-welfare systems that must fall under the purview of Democrats. As for bank CEOs, once you attain a level of Master of the Universe it pretty much takes an act of God to knock you off the purch. I'm not certain Barack Obama has reached the status of diety yet. But I hear from some reliable sources he's working on it before the upcoming G-20 meeting in London.

While GM's sales have been on the slide for a long time, and Wagoner and management do deserve blame, it was the crash of the financial industry that saw credit tighten up and people holding off major purchases that pushed GM even closer to the brink. But these same CEO’s and managers in the financial industry get to keep their jobs even though they are complicit in the contraction of the economy which were a direct result of the decline in sales of autos, houses, etc??? Truly astounding!

So my analogy:
15 out of 30 students are failing in a classroom because a teacher lacks the necessary skills to teach the curriculum. The teacher is punished by the principal and school board by taking away the text books with which to teach the subject matter -- with the condition the text books would be returned upon an improvement of grades by the students. Inevitably, all the students fail and get expelled and only the teacher gets fired. Yet the principal and the school board, who allowed all the students to fail, are asked to fix the problem of there being no text books in the classroom.

Fired -- sure it is. But where do you want to draw the line?

B of A's execs did not qualify for a bonus this year because they didn't meet all the qualifications for one. Part of it was the performance of the stock price, which as we all know, has cratered.

Had they managed to increase the share price while generating a profit, I'd be all for giving them a bonus. In a year where the S&P 500 was down by 40 percent, if they managed to be profitable and increase the stock price, that would definitely deserve a fat bonus.

Tony, believe me. If Canadian banks weren't so regulated they would be doing their best to be as exciting as the other banks. But back in the 80s and 90 during the era when other countries were starting to seriously de-regulate, we had a Prime Minister (Jean Chrétien) who was enough of a pool shark himself to know where that would all lead. So our banks are safe.

Meanwhile our economy, based way to heavily car manufacturing, is crumbling away.

So it's not all boring security up here.

Because the powers that be right now including Biden and Geithner caused this financial crisis, are buddies with the wall street crowd, have made millions of dollars off of this mess and the auto industry is a separate entity altogether. We are watching outrageous old boy networks paying each other off, watching each others back and they are not even hiding it. All out in the open. Rated.

Read Simon Johnson's "The Quiet Coup" -

http://www.theatlantic.com/doc/200905/imf-advice

Also, his "Baseline Scenario" (baselinescenario.com) site is well worth your time for insights on the breadth of issues pertaining to the financial mess.

Tony -- Breaking news from Reuters. Does this make sense?

Bank of America Corp. (BAC: News ) plans to increase some investment bankers' salaries by as much as 70% following the takeover of Merrill Lynch & Co., Bloomberg reported, quoting people familiar with the proposal.

Bank of America may raise the annual base pay for some managing directors to about $300,000 from $180,000, said the people. Salaries for less-senior directors would be raised to about $250,000 from $150,000, and that of vice presidents to $200,000 from about $125,000, the people said.

The adjustments, which may be rolled out as soon as next month, are designed in part to align the salaries of employees at Charlotte, North Carolina-based Bank of America and workers at New York-based Merrill, one person familiar with the plans is reported to have said.

Bobby G: Nice article on The Atlantic by Simon Johnson.

Please feel free to read my latest here on Open Salon, it may be up your alley. Let me know.

http://www.opensalon.com/blog/dean_petkanas/2009/03/21/supercalifragilistic_hyperinflationary_doses

Not a very difficult question, really.

The two industries are about as different as night and day. So are the reasons why they failed. The Auto industry has been doing poorly for decades, because it has been out-competed by foreign companies that make better and more affordable cars. The financial industry was doing great - too great, it turned out, when their self-inflated bubble popped.

Automakers are an increasingly prehistoric industry, especially as we move towards more energy efficiency and public transportation. We have precisely zero chance of achieving this new economy without banks. So while the moral issue of rescuing one or the other seems equivalent, the practicality of doing so is apples and oranges.

People still seem to be under the impression that we could somehow survive the top 10 banks in the world failing simultaneously. I've yet to hear anyone seriously diagram the consequences of letting the market run its course and not conclude that the consequences would be a disaster. Nationalizing the banks is still a possibility, but there is no "undo" button for that, so we should indeed be saving it for plan Z.

If the auto industry fails, the banking industry will not necessarily fall because of it. If the financial industry fails in total, then most every industry, including auto, will go with it. It may suck that we have to make hard choices, but the choice seems pretty clear to me.

RATED and submitted to digg.com

I believe a clear explanation exists...and one not based on conspiracy theories.

First, the government can't pull confidence out of the financial sector abruptly or risk a run on the banks. The reason all banks were given TARP money was to mask who was in real trouble (though that has become more transparent recently- thought now it's not as important because of the government backstop). If that hand is tipped, you have a run on one of the large money-center banks and the FDIC exposure itself from someone like Citi would be close to $700 billion. If two or more fail...well... If a stark vote of no confidence is given, then you have a fairly massive unwinding. Yes, you have the same unwinding with automakers but it typically doesn't go KABOOM...see next...

Second, in the financial sector there is no Chapter 11 or 13 restructuring type of bankruptcy. By law, there is dissolution and liquidation by FDIC or the facilitation of a merger (read shotgun wedding) - in other words, just Chapter 7. See Lehman for an example. We're out of shotgun wedding options because of how they have weakened even once strong banks (see BofA and Wells by way of Merrill and Wachovia). So, GM and Chrysler can restructure and come back as something new and shiny. A bank just goes bye-bye. That's an important distinction.

I believe the actions taken show some savvy. Several bank CEOs have been asked to step down as part of the bailout process. These included the heads of Fannie, Freddie, and AIG. In addition, other CEOs were removed in the quick process of resolution as in the cases of WaMu and Wachovia. Don't think the banks have escaped anything. After the stress tests and PPIP assets sales attempts a few will be nationalized if the conservator ship legislation goes through. At that point the government will appoint new boards and those boards will start firing people. But you have to do that as part of the discovery process. The PPIP and stress tests (really the PPIP) will start to reveal who is in real trouble. Unlike the car companies, the banks don't have a short-term cash flow issue that makes their bankruptcy now as imminent. They have a long-term solvency issue which when backstopped by the government can be unwound and managed more carefully. The car companies just chew through cash which is harder to deal with since you have to constantly throw money at the problem - not that that is horrible. It's just something you can't sit on as long. Not all the banks need the bailout money. The PPIP will force some hands to be revealed. Those that mark down their balance sheets now will likely do better under PPIP. Those that don't will reveal the true level of toxicity on their balance sheets.

I think Professor Loo is on to something, to a point, about the role of finance capital, although for a more Niall Ferguson style reason, namely, the government always has to sell its debt to finance its package of "public goods" that it is offering to "sell" to the voters, especially in a populist "democracy", which is where I would, respectfully, disagree with Professor Loo, look to see what is really ending, namely what one historian called the era of bureaucratic populism that dates to FDR, centered around militarized Keynesiansm, not so different in the end from Professsor Loo, that is near the edge of a bankruptcy. We aredangerously close to that now, which means Babylon on the Potomac needs the Whore of Babylon on Wall Street, and vice versa.

Exactly, Skewz. Sirota and the modern "populists" (I used to like that term) want a quick hollywood ending where the bad guy gets punished and we all go our merry way. Its most fitting denouement to the Baby-Boom generation economy imaginable: we create an incredibly complex problem, and we take to the streets in anger when there isn't a quick-fix available!

Nobody has the patience to do any thinking anymore. Just string up anyone who looks like they might be a poorly-performing CEO. We're already biting the hand that feeds us, and if we keep thinking that our problems would all go away if it weren't for those few greedy people... then we'll just be cannibalizing ourselves.

Maybe they want to scare the HOLY SHIT out of all the reckless CEO's out there, Ya think maybe? I say fire them all. GM, Ford, and all the big financial institutions CEO's. Send a message, NO MORE.
They're all replaceable, just like you and I.

President Obama can make as many requests as he likes but only the board of GM can order the CEO to step down. And everyone seems to have developed short term memory loss, it was Lord Bush who gave the banks a blank check, not President Obama, he had no control over that mess but he does have a certain degree of control over the bailout money going to the car companies. Understand the difference?

Why would Obama choose to sacrifice the CEO of an entity that produces hammer and tong products and yet let the rapists of the free market slide? The big boys of the financial institutions do not produce anything except smoke and mirrors and speculation. Wait, isn't that what the administration is predicated upon? Nice feelings?

you get the government you deserve. a nation of consumers has to take what they are given. you are born into serfdom, are told you are citizens in a 'democracy' and told that means your betters in the beltway will make decisions for you.

you complain endlessly that decisions seem to favor the rich and well-connected, but you never catch on to reality.

"government of men, not laws"- when was the last time you voted for a law? you vote for men, men rule you. is that too hard to understand? i mean, they are all single syllable words.

king obama is firing these guys cuz he can- they are despised, dispensable, and make the cows smile to see them humiliated.

incidentally, the shareholders are just like the 'citizens' of the usa, used and abused, and powerless to resist for lack of character. there was no shareholder rebellion when the e-car was crushed, no complaints when production was concentrated on gas guzzlers.

you get the government you deserve works in business, too.

But there is so much skeezy crap that they can pull.

When was it, wasn't it Enron where they were making deals that would take place over YEARS and declaring the entire 'profit' in the first year. As in they got all of the money in that one year, which was an outright lie. But the 'Enron friendly' regulators just winked and looked the other way...

There is enough bullshit and accounting tricks that were pulled that you can't make me believe that some, perhaps a large amount, of the money that was 'lost' never existed. Well, except for the bonus money as reward for cooking up the lies...

GM Stock right now is worth $2.60 a share. With 610 million shares outstanding, 100% of the outstanding shares can be purchased for $1.586 Billion Dollars and we have lent GM $15.6 Billion already? Why not instead have bought all the stock, temporarily Nationalize it and sell the shares when they go up at even $5.20 a share the profit would double and at $7.80, triple and at $11.80 it would quadruple? What are we missing here? I say let them go bankrupt and buy them out and sell it to the AAWU. See, if they can make some sense of the auto business. Or turn it over to academia, we make everything profitable.

Watching too many bobble heads, I gleaned (as we all should know) an oldie but a goodie... "follow the money."

The Money came from Wall Street. Money for Obama, money for all of the candidates. Detroit didn't have the money.

I'm just a simpleton trying feel my way through this maze of financial morass or mess.

When everyone is lying or holding back the truth, what are we to do?

Oh, and going for ratings... let's not forget we don't have a Walter Cronkite.

We have ratings rabid bobbleheads. You have no ethics or dignity?

Where's the self-respect?

This is just a partial theoretical answer to an exponentially huge problem.

I wish Obama the best. As I wish all of us the best.

I'm very upset with banks...

another day

Professor is right. Nationalization of the failing industries would be the least expensive way to save them, at least for the taxpayers. But that can't be allowed in America. We would never take away from the rich their control of that which is or someday will be valuble. The American taxpayer will digg them out of this hole, hopefully, and never be repaid. Nationalization would prove once and for all that capitalism is what it is. A fairy tale of the rich.

There is a big difference between bank CEOs and auto industry execs. Wall Street has bought $5 billion worth of political influence over the past decade, including 3,000 lobbyists who fought for deregulation of the financial sector. With so many Wall Street insiders in the executive and legislative branches of government, they take care of their own.

My question exactly. Is it because the auto industry is easier to understand than the world financial system? Is it blue collar vs. white collar? Is it votes for 2012?

I don't think it's about equal -- it's about politics.

I, too, question why the auto industry is being held accountable in ways the banking industry is not. Of course, did the auto industry learn anything in the 1970s? No. When gas prices rose then, auto makers continued to build "gas guzzlers" and Japanese carmakers began selling cars to Americans with great success...smaller, more fuel efficient cars. But GM, etc. knew what we REALLY wanted and as obedient servants of Big Oil, did what they did. So, now, nearly 40 years later, after the last two decades of building Hummers and SUVs, they should be bailed out? Let them fail.....they DID fail.......

But the banks failed, too, and more from deliberate corruption and greed than arrogance and stupidity as in the case of carmakers (although Big Oil's greed is a huge part of this!) THEY ARE THE ONES WHO BROUGHT DOWN THE WORLD ECONOMY!!

So, why now the different treatment?! I don't get it, either. My first thought is that Ralph Nader was always right: there is no difference between Democrats and Republicans, certainly not at the Millionaires' Club...oh, excuse me....I meant, in Congress.

I can't believe Obama's not intelligent enough, especially considering his roots, to understand that JOBS are the issue. Banks certainly aren't creating any......and TARP, we were told, was imperative to save the banks and therefore, the economy...AND IT DID ABSOLUTELY NOTHING other than pay mainly for Super Bowl parties, jets, and bonuses.....

And now that the banks have done absolutely nothing to benefit the economy that I can see, Obama continues to support them. He is losing creidbility and Americans are beginning to lose patience. If he doesn't deliver relief before summer, it could be a long, hot, angry, ugly summer.....JOBS ARE THE ISSUE, AN ISSUE I DON'T REALLY HEAR ABOUT.....and that's a worry!